Hey Guys, Would it be a good idea to short some of my shares using the CFD account? I have AirBnB in my investing account and I am down 28%, I started shorting the share every day and closing the trade at market close, overall it has worked as i have had gains of 32% on the short positions, but I think this is a fluke and a bad strategy to use for hedging especially because of the overnight fees and spread.
What do others think ? i think i fluked the AirBnB trades.
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If you short your shares, how will you make gains?
It’s an inefficient process imo. If it was perfect, without fees, then if your shares dropped in value by 10%, your CFD position would offset.
Unfortunately it’s not - the CFD provider has to make a profit somehow.
Invest long term. And avoid additional fees.
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Even it it wasn’t a CFD, but a real short - you would still pay interest - it’s inevitable.
I would have said that using the CFD for hedging is an excellent idea, if only this was a forum for professionals.
We are all noobs here, so no - I’d say playing with the CFD account is dangerous, because most likely you don’t have a good idea of what you are doing and the mechanics behind the CFD trade.
In general, yes, but not around here. 6% interests on the margins. IBKR offer margins account for shorting, or CFDs, both at 1.6% (last I checked, may be a little higher now).